This outlines my oil temp gauge install.  I used the location on top of the filter flange because its a neat clean factory install that won't get in the way when changing the oil.

If you are confused by any of this its probably best if you don't do it yourself.  You have been warned.

Parts

Oil Temp Sender     1H0 919 563    VW PN   - The VDO sender is too long

Oil Temp Gauge      310-106           VDO PN  - VDO Vision 2 1/16"

16 gauge wire          For gauge lights

14 gauge wire          For sender and gauge power and ground.  I got black/red (power) and yellow for sender signal

1/4" Spade Connectors for ends of wires.

Heat shrink tube to make the connections neat and safe

Wire loom to organize wires under dash and to protect sender wire under hood

Tools I used

flat head screwdriver to get engine covers off

5 mm allen key to remove plug

9/16 open ended wrench for sender.  I'm sure a metric will fit but this is what I had

something to extend the length of the allen key to get torque

Here you go

1- Make sure car is not hot or you WILL burn yourself.

2- Remove both engine covers.

3- Unhook NEG battery connection when hooking up the wiring.

4- Good luck

On top of the oil filter flange there is a plug where a oil temp gauge should be if VW was thinking right.  You can't see it because there is too much stuff in the way but it is there and you can fit two hands in there.  If you have a Bentley find the oil filter, it screws into the oil cooler, on top of this is the flange which has the plug.  Mine had a Allen head bolt size 5 mm.  It's REALLY hard to get this plug out.  I used a deep socket on the end of my allen key for torque. Be patient and be sure your allen key is in the bolt properly before using the extension.  The allen key hole is a good 1/4" deep so if your careful you should not strip it.

DO NOT USE SEALING TAPE OR PASTE ON SENDER

DO NOT OVER TIGHTEN SENDER

Put your sender in the hole left by the plug, finger tighten and then use a wrench.  FOR THE LOVE OF GOD DO NOT OVER TIGHTEN.   I did the first time and broke mine off.  Was quite a scare until I got the bottom part out of the flange.  Just give it a couple turns, start the car for 30 seconds or so and then check for leaks.  If there are any give it another small turn and so on.

Where you put your gauges is up to you.  I put mine in the center column using the VW radio blank panel. 

Radio Blank Panel   1J0 857 231 VW PN    - Get right color for your car - IQA = Black

I won't go into much detail on the wiring because if you need detailed wiring instructions you probably shouldn't do it..  There is a wire from the sender to the gauge.  The gauge also needs a switched power and a good ground.  To hook up the lights on the gauges I did this.  This picture from http://www.speakeasy.org/~giordy/gaugeinstall/index.html